WASHINGTON, Nov 15 (Reuters) - The United States needs to
update its energy policy to reflect the boom in natural gas and
oil production that has boosted manufacturing jobs, said the top
Democrat on the Senate energy committee on Thursday.

Ron Wyden, who is in line to take over the panel's gavel in
January, said he sees the opportunity for "transformative energy
policy" to both spur jobs created by the newfound wealth of
energy while also protecting air and water from pollution.

But Wyden and Lisa Murkowski, the top Republican on the
committee, who spoke at an event held by CQ Roll Call, provided
few details on the shape new energy legislation would take.

But they stressed they wanted to work together on
legislation that would strike a balance between economic
development and job creation, and environmental protection.

"We feel really strongly about checking the gridlock at the
door, working together on, in particular modernizing our energy
policy," said Wyden, who represents Oregon and has a long
history of working with Republicans on thorny issues including
taxation and health care.

Congress has not had a comprehensive energy bill since 2007,
well before the widespread use of hydraulic fracturing or
"fracking" technology to blast free natural gas and oil trapped
in shale rock.

Those abundant supplies have put the United States in line
to become the world's largest oil producer by 2017, overtaking
Saudi Arabia and Russia, the International Energy Agency said
this week.

"I think everybody in this room would agree that there is a
pent-up demand when it comes to moving energy issues through the
Congress and updating, refreshing, just focusing on energy as a
sector of the economy that has such potential," said Murkowski,
who comes from the oil- and gas-rich state of Alaska.

The production boom now supports a total of 1.7 million
jobs, a number that could swell to almost 3 million by 2020,
forecaster IHS Global Insight has said.

President Barack Obama's administration is studying whether
more environmental regulations are needed for fracking, and
whether to end the industry's tax breaks - two developments that
could curb production.

FEW DETAILS YET

Murkowski has been working on a long-term energy blueprint
for about a year, and has been talking with Wyden about her
ideas.

In May, she said it could include legislation to increase
oil and gas production, improve energy efficiency, update the
transmission and storage grid, and reduce the uncertainty in
short-term tax incentives for wind and solar power.

"I want this to be a proposal of good ideas and direction,"
Murkowski said, saying she likely would not unveil the plan
before January.

Wyden, who is also on the Senate finance and budget
committees, said he wants the legislation to include measures to
respond to coastal states' desire to get a piece of the tax
revenues the federal government gets from offshore drilling
projects.

Wyden said he hopes Congress will extend a wind production
tax credit to preserve jobs in the sector.

He said he believes tax reform talks will focus on putting
renewable energy and fossil fuels on a "level footing," although
he acknowledged that tax breaks for all types of energy will
likely be "ratcheted down" as Congress looks for ways to cut the
federal deficit.

Both Wyden and Murkowski were skeptical about the political
odds for a new tax on carbon emissions, an idea which has
received considerable focus from both environmental groups and
moderate Republicans.

On Thursday, conservative advocacy group Americans for
Prosperity said House Republican leaders had signed a pledge to
oppose a carbon tax.

"It's pretty obvious, and you've seen it again this week
from comments, that whether you are for a carbon tax or against
it, you'd have to say this is going to be a big lift,
politically," Wyden said.
(Reporting by Roberta Rampton; Editing by Lisa Shumaker)